But there are fears people are being caught out by opportunistic middlemen whose advice is not entirely impartial. These advisers may benefit, for example, from fees related to how the money is invested in future or merely for effecting the transfer. It is a requirement in law that anyone wishing to transfer a pension worth more than £30,000 seeks financial advice.

But Telegraph Money has seen examples where financial advisers charge extortionate fees to move a pension.

The City watchdog, the Financial Conduct Authority, has intervened and blocked over 50 advice firms from performing pension transfers.

Tom McPhail, of Hargreaves Lansdown, the pension and investment firm, said: “There is a lot of inappropriate advice being given. Some investors will lose their money, and I expect the regulator to come down hard. We’ve seen this before.”

“Look at the stock market over the last year. It may well keep going up, but at some point there will be a correction. We are seeing lots of money flowing out of final salary pensions and into self-managed pensions.

“This could be a particularly bad moment for a correction.”

Would you rather £35,000 a year for life or £1m in cash?

Swapping a final salary pension, which pays a guaranteed income for life based on salary and length of service, for a lump sum, should not be undertaken lightly.

Once the transfer is undertaken the money usually remains within a pension account. It is then often down to the saver to manage how it is invested and how much income they withdraw from it. If there’s a market downturn, and the portfolio value falls, it may be necessary to reduce withdrawals. In a final salary scheme the income is relatively secure and grows with inflation.

For Mike Hudson, 56, the benefits appeared to outweigh the risks. Under the terms of the final salary scheme provided by his employer, a large energy company, if he had wanted to start taking retirement income ahead of the scheme retirement age of 60, he would have had to suffer a cut in income.

His job as an engineer was stressful and involved long hours. Divorce also meant he needed to rebuild his finances. So he wanted the money ahead.

One firm was really giving the hard sell, saying things like ‘we can get you your lump sum next week’ and rushing me into signing the papers quickly.

He requested a “cash equivalent transfer value” from the company and was offered 30 times the annual income he would have received from the scheme – equivalent to over £1m in cash.

He can now make ad hoc withdrawals, which is not the case with final salary schemes. The added flexibility meant he was able to pay off his mortgage and buy a new car and caravan. He has invested the majority in a personal pension with AJ Bell, the fund shop, and plans to live off the returns.

Mr Hudson said: “It’s not for everyone and of course there are risks. If there was a market crash yes that would impact my personal pension, but it would also have an impact on my former employer and its ability to fund the final salary scheme.”

Under FCA rules, because the value of the pension being moved was worth more than £30,000, Mr Hudson had to see a financial adviser. He did some research and discovered a huge variation in fees.

Many of the most reputable advice firms refuse to work in the area, fearing that clients will subsequently regret their decision and complain.

Mr Hudson said: “I checked with a few advisers. One firm was really giving the hard sell, saying things like ‘we can get you your lump sum next week’ and rushing me into signing the papers quickly.”

In the end he picked Tideway, a firm of specialist pension transfer advisers, who charge 1pc of the value of the pension to analyse whether a transfer should be made and then move the funds.

Other firms that Mr Hudson received quotes from asked for as much as 5pc of the value of the pension for the same work.

Once transferred you can manage the money yourself or, like Mr Hudson, use an adviser to help set up an investment strategy.

James Baxter, a partner at Tideway, warned that people need to be aware that big losses to their portfolios “can be devastating” once outside of the protection of final salary schemes.

“The two big issues we see are people being over-exposed to a single company, and investing in illiquid assets that become impossible to sell,” he said. Unregulated investments are another problem, he added.

Telegraph Money has seen other examples of reports prepared for clients wishing to transfer that contained at least one error.

One, produced by De Vere, an international advice firm, recommended a client move their pension from the final salary scheme offered by BP to an overseas pension. Staying in the scheme meant the member would receive a starting pension of £48,000 a year.

Leaving the scheme would give them a lump sum of £1.5m.

The report goes on to list the reasons to transfer, include claiming overseas schemes “eliminate uncertainty” following Brexit.

It also says transferring would protect the client against the risk of the employer going bust, and references the high-profile problems at BHS and Tata Steel.

While companies do fail leaving deficits in their pensions, BP’s £28bn scheme is among the strongest and the business is large and successful. Members of final salary schemes are also covered by the Pension Protection Fund. This promises to pay at least 90pc of what retirees would have got up to a limit of £38,500 per year.

The report also claims there would be no test against the “lifetime allowance” on pension savings if the scheme were moved abroad. This is incorrect.

Since the report was produced, De Vere has halted all pension transfers while the FCA undertakes a review.

A spokesman said: “We are confident here has been no detriment to clients and there have been no complaints. Working with the FCA we have taken steps to ensure our clients’ best interests have been served.”

Have you cashed in your final salary pension? We want to hear from you: sam.brodbeck@telegraph.co.uk